Analysis Of Financing Method Selection And Financing Effect Of Yanzhou Coal Cross-border Merge And Acquisition

With the fast development of economic globalization,our government has been actively guiding enterprises to "go out" and implementing the blueprint of "One Belt One Road".With our country’s supply-side structural reforms,the enthusiasm of mergers and acquisitions of enterprises in our country is quite high,and the quantity and amount of mergers and acquisitions are increasing rapidly.In recent years,quite a few Chinese companies have successfully carried out large-scale leveraged mergers and acquisitions,which have attracted worldwide attention.However,cross-border mergers and acquisitions are costly,and financing difficulties have become the primary problem faced by Chinese enterprises in the cross-border mergers and acquisitions.Moreover,due to the lagging development of our country’s stock market and bond market,problems such as unreasonable financing arrangements have restricted the cross-border mergers and acquisitions financing of Chinese enterprises.Based on above situations,it is of great practical significance to research on the financing methods Chinese enterprises adopt in cross-border mergers and acquisitions.The paper takes the case of Yanzhou Coal Mining Co.,Ltd.("Yanzhou Coal" for short)acquiring Coal&Allied Industries Limited("C & A" for short)for research.Yanzhou Coal had faced the problem of how to raise a huge amount of fund during this meger and acquisition transaction.However,by ingeniously setting up a three-tier domestic and foreign financing structure made up of Yancon Group,Yanzhou Coal,and Yancoal Australia,Yanzhou Coal chose an innovative combination financing method,"internal capital market financing-strategic alliance financing-financial innovation financing",and gained significant financing effects.Based on literature reviewing,this paper carries out research on above case,analyzing the details of Yanzhou Coal’s choice of combined financing method,and the reasons for choosing this financing method and its financing effect,and obtains conclusions and enlightenments accordingly.We can draw the following conclusions from the research:(1)The choice of Yanzhou Coal’s financing method is affected by the company’s own conditions,the transaction characteristics,and the development of capital market;(2)Internal capital market financing is helpful for adjusting the capital structure of Yancoal Australia and Yanzhou Coal;(3)Strategic alliance financing can exert synergistic effect of capital and operation;(4)The use of financial innovative financing method of issuing private convertible bonds is beneficial to reduce financing costs.In the meanwhile,the following enlightenments are obtained from the case research:(1)Companies need to consider comprehensively various factors in mergers and acquisitions,and determine financing methods that meet the actual needs of both parties of the merger and acquisition transaction;(2)The innovation of financing tool and expansion of financing channels of mergers and acquisitions in our country need to be accelerated.The government should gradually improve financial infrastructure and capital market operation mechanism to create a good environment for the innovation of mergers and acquisitions financing tools;(3)With the help of institutional investors in cross-border mergers and acquisitions,companies can increase fund sources,reduce financing costs,and reduce merge and acquisition risks,thereby increasing the success rate of merge and acquisition.